Real Estate Investor Magazine South Africa February/March 2019 | Page 62

SOLAR
Commercial properties
switching to solar
BY JOHN WHALL
A
n increasingly popular trend over the past few years
in the commercial property sector is the installation
of solar technology. This is largely being driven by
technological innovation which has resulted in greater cost
efficiencies and increased demand as the cost of electricity in
South Africa continues to skyrocket. 
All indications are that solar energy is the fastest growing
alternative energy industry globally. Its adoption is already
impacting the way buildings are planned and constructed. No
longer is solar an after-thought, rather it is becoming part of
the upfront design of new commercial buildings in a drive to
construct properties that are energy efficient and cost-effective
in the long term. And those who don’t have solar are switching.
John Whall, CEO of Heartwood Properties outlines some of
the reasons why solar is no longer just a trend.   
The Eskom battle 
There is no doubt that the high cost of electricity – and the
notorious unreliability of Eskom’s power supply in recent years
– is playing into the growing appeal of solar. Eskom CEO
Jabu Mabuza recently announced that the power utility, in
its current structure, is not sustainable.  Eskom has applied
for substantial tariff increases in the next three years: 15% per
year for the next three years, as part of its efforts to generate
sufficient revenue to meet at least some of its staggering debt
commitments. But, as a RMB Global Markets Research
comment points out, the compound effect of all Eskom’s
‘moving parts’ is a tariff-increasing path that could see the
standard traffic price of electricity rise by 90% over the next
five years. 
Rising electricity costs, coupled with recently re-introduced
load shedding, ensures that commercial buildings which offer
solar technology have a competitive advantage over a building
which relies solely on Eskom for its power needs. 
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FEBRUARY/MARCH 2019 SA Real Estate Investor Magazine
Price parity 
In the past few years solar energy has become an increasingly viable
option as it has achieved the price parity point: that point where
self-generation becomes more cost effective than retail electricity
bills. As solar panels become more effective, battery storage
facilities are increased and costs are reduced, solar installations
will increasingly become the norm both for existing buildings, but
particularly for new developments.   
Solar benefits  
Solar energy has the benefit of being a significant resource that
can be used for a multitude of everyday needs including electrical
power heating and cooling, amongst others. Globally, consumers
are looking for the most reliable, affordable and environmentally
responsible energy source. Solar fits the bill in terms of both
affordability and by being environmentally responsible. Reliability,
however, is a function of the prevailing weather conditions. The key
challenge with solar energy is that it’s only available during the day
in sunny weather but is not available during cloudy or rainy days. 
Challenges 
Currently, there is not yet sufficient technology in place for
residential solar installations in South Africa, primarily due to
insufficient battery storage given that homes require the bulk of
their power needs early in the morning and in the evenings. That
said, as new technologies are deployed costs will decrease and
integration will be improved. Residential solar installations are
therefore likely to become increasingly popular within a year or
two according, to numerous experts we have consulted with on this
topic in the past year.
There is no doubt that renewable sources of energy are the
future. And with the current uncertainty around Eskom’s long term
sustainability in question, solar installations are making more and
more sense. 
SOURCE www.heartwoodproperties.co.za